Torrance Bankruptcy During Divorce Lawyer
Divorce in Torrance can be a financially challenging time, often prompting individuals to consider bankruptcy as a potential solution. When separating from a partner, you may find yourself grappling with the realities of managing expenses and debts on a single income. This newfound financial strain can make it difficult to stay afloat, especially if you carry a significant debt load. For some, filing for bankruptcy may provide the opportunity for a fresh start, alleviating the burden of overwhelming debts.
However, the timing and sequence of filing for bankruptcy and divorce can be complex, raising questions about the best approach. Should you file for bankruptcy first or pursue divorce proceedings simultaneously? These considerations require guidance from our experienced Torrance bankruptcy during divorce lawyers at Wadhwani & Shanfeld.
The Timing of Bankruptcy and Divorce
Deciding when to file for bankruptcy in relation to your divorce proceedings is a crucial consideration with potential implications. Here are the options to consider:
Filing Jointly Before or During Divorce
You have the option to file for bankruptcy jointly with your spouse until a divorce decree is officially issued. Joint filing can be more cost-effective, and it allows you to discharge certain debts like overdue utility bills, credit card balances, and personal loans. This means you won’t have to divide these debts during the divorce process. However, it is important to note that a joint bankruptcy case in Torrance will temporarily halt the division of assets, preventing the completion of your divorce until the bankruptcy proceedings are finalized. Fortunately, a Chapter 7 bankruptcy typically takes only 4-5 months to complete.
One potential disadvantage of joint filing is the need to pass the “means test,” which evaluates your combined household income. If you are still living together during the divorce process, your pooled income may disqualify you from Chapter 7 eligibility. In such cases, waiting until after the divorce, when your individual income is likely lower, could increase your chances of qualifying for Chapter 7.
Filing on Your Own After Divorce
There are advantages to filing for bankruptcy in Torrance after your divorce is finalized. By then, you will likely be living in your household, which can improve your chances of passing the Chapter 7 means test based on your income.
Additionally, if you wish to set aside a property settlement agreement from your divorce, you may need to file for Chapter 13 bankruptcy. This process typically takes 3-5 years of regular payments to complete. For instance, if awarded a portion of marital property, which you plan to pay your spouse over time, including such an agreement in your bankruptcy filing could benefit you. Consulting with a bankruptcy lawyer before filing while married can help you navigate these nuances.
It’s important to note that filing for bankruptcy after divorce will not eliminate family support obligations, such as child support or alimony payments. These debts are not considered dischargeable in bankruptcy, regardless of how burdensome they may be.
Contact Our Bankruptcy Divorce Lawyers
Dealing with the financial challenges of divorce can be daunting, but seeking professional guidance can help you emerge in a stronger financial position. Contact Wadhwani & Shanfeld today to discuss your unique situation with their experienced Torrance bankruptcy during divorce lawyers.
